M/s. Vina Viren Ahuja Versus DCIT CC-47, Mumbai

2016 (11) TMI 1144 - ITAT MUMBAI

Addition to income on assessment u/s 153A - abatement of assessment - Held that:- In the case where the assessment has abated, the Assessing Officer can make additions in the assessment, even if no incriminating has been found. But in other cases it is held that the assessment u/s. 153A can be made on the basis of the incriminating material which in the context of relevant provisions means books of account and other documents found in the course of search but not produced in the course of origin .....

ot counter or rebut the contentions raised by learned AR and learned Departmental Representative could not differentiate the Judgments cited and relied upon by learned AR. Therefore considering the factual position as well as settled legal position, we hold that the additions could be made only on the incriminating material found during search and since no incriminating material found during search therefore additions made were unsustainable in the eyes of law. Accordingly we delete the addition .....

u/s. 143(3) read with section 153A. The assessee is a wife of Shri Viren Ahuja who is the main director of Bermaco/Flemingo group of companies. The assessee running her own proprietorship firm in the name and style of Venus Designs which is engaged in the business of export of home furnishings and sale of handicrafts. The search and seizure action u/s. 132 was carried out at the residence and business premises of Bermaco/Flemingo group on 31.10.2009. However, no incriminating material or any ot .....

. 153A and the consequential assessment order are bad in law and without jurisdiction. 2. The learned CIT(A) has erred in law and in facts in conf irming the addition of ₹ 48,00,000/- made by the Assessing Officer u/s. 68 of the Act in the assessment order passed u/s. 153A r.w.s. 143(3) of the Act which is illegal and bad in law. 3. The learned CIT(A) ought to have held that the addition of '48,00,000/- made by the Assessing Officer while passing the order u/s.153A r.w.s. 143(3) of the .....

the appeals are general in nature therefore the same are dismissed. Ground No. 1 5. The present ground has been dealt with by learned CIT(A) in para 5 to 6.1 of his order. Learned AR assailed the order passed by learned CIT(A) on the ground that the Special bench in the case of All Cargo Global Logistics Ltd. Vs. DCIT (137 ITD 267) has held that provisions of Section 153A come into operation if a search or requisition is initiated after 31/05/2003 and on satisfaction of this condition, the AO is .....

ial has been found. But in other cases the Special bench held that the assessment u/s.153A can be made on the basis of the incriminating material which in the context of relevant provisions means books of account and other documents found in the course of search but not produced in the course of original assessment and undisclosed income or property disclosed during the course of search. In the present case, the assessment had been completed under summary scheme u/s 143(1) and time limit for iss .....

diction as well as jurisdiction conferred on him under section 153A for which assessments shall be made for each of six assessment years separately - Held, yes -Whether no addition can be made in respect of unabated assessments which have become final if no incriminating material is found during search - Held, yes in favour of assessee. Relevant para No. 28 read as under :- 28. In dealing with those arguments, the Division Bench outl ined the ambit and scope of the powers conferred by section 15 .....

sed on the question, as to whether a particular income could be treated as 'undisclosed income' or whether a particular income could be said to be relatable to the material found during the course of search, etc. which led to prolonged litigation. To overcome that difficulty, the legislature by Finance Act 2003, decided to discard Chapter XIV B provisions and introduce Sections 153A, 153B and 153C in the IT Act. (9) that Sect ion 153A contemplates is that, notwi thstanding the regular pr .....

and thereafter assess or reassess the total income for those assessment years. The second proviso to Section 1 53A provides for abatement of assessment/reassessment proceedings which are pending on the date of search/requisition. Section 153A (2) provides that when the assessment made under Section 153(A)(1)is annulled, the assessment or reassessment that stood abated shall stand revived. (10) Thus on a plain reading of Section 153A of the Income-tax Act, it becomes clear that on initiation of .....

oceedings pending in appeal, revision or rectification proceedings against finalised assessment/reassessment shall not abate. It is only because, the finalised assessments/reassessments do not abate, the appeal revision or rectification pending against finalized assessment/reassessments would not abate. Therefore, the argument of the revenue, that on initiation of proceedings under Section I 53A, the assessments/reassessments finalised for the assessment years covered under Section 153A of the I .....

proceedings under Section 153A would not affect the assessment finalised on 29-12-2000. (12) Once it is held that the assessment finalised on 29.12.2000 has attained finality, then the deduction allowed under section 80 HHC of the Income-tax Act as well as the loss computed under the assessment dated 29-12-2000 would attain finality. In such a case, the A.O. while passing the independent assessment order under Section 153A read with Section 143 (3) of the I.T. Act could not have disturbed the as .....

r Section 80 HHC was erroneous. In such a case, the A.O. while passing order under Section 153A read with Section 143(3) could not have disturbed the assessment order finalised on 29.12.2000 relating to Section 80 HHC deduction and consequently the C.I.T. could not have invoked jurisdiction under Section 263 of the Act." 7. We have also considered the Judgment rendered by Hon'ble Jurisdictional High Court in the case of Murli Agro Products Ltd. (49 taxmann.com 172), wherein it was held .....

assessment order passed under section 153A, read with section 143(3) was erroneous or prejudicial to interest of revenue - Held, yes [Paras 13 and 14] [In favour of assessee]. 8. From the conjoint reading of the Judgment referred by learned AR, we are of the view that in the case where the assessment has abated, the Assessing Officer can make additions in the assessment, even if no incriminating has been found. But in other cases the Special Bench held that the assessment u/s. 153A can be made o .....